Suppose the demand and supply of chickens is given by:
(Qd = quantity demanded, Qs = quantity supplied, p = price)
Qd = 20,500− 250p
Qs = 5000 + 100p
a) Graph the demand and supply curves and determine the equilibrium price and quantity.
b) Suppose a quota of 4000 turkeys is imposed. What will be the new equilibrium price?
c) Show the loss to consumers? What is the net gain, if any, to producers?